The present application relates generally to routing and processing of computer messages and, more specifically, routing and processing of computer messages within a payment processing network.
Payment card numbers include information that enable processing of payment card transactions. In known systems, payment card numbers generally consist of at least two distinct number groups. A first group of numbers corresponds to a Banking Identification Number (BIN). The BIN is a fixed-length (typically six-digit) identifier associated with an issuing bank and particular payment card product offered by the issuing bank. An issuing bank may offer one or more payment card products, and, as a result, may be assigned one or more BINs. Specific ranges of BINs are reserved for payment processors to assign to their associated issuing banks. Accordingly, based on a BIN, one can generally determine the payment processor, the issuing bank for the payment card, and the particular payment card product associated with the payment card.
Known payment processing systems use the BIN to route transactions across payment networks. Specifically, when a cardholder initiates a payment card purchase with a merchant, the transaction data is often times first sent to an acquiring bank associated with the merchant. The routing system of the acquiring bank analyzes the BIN to determine which payment processor the transaction data is to be routed for authorization and routes the transaction data accordingly.
Payment card numbers in known systems also generally include a second group of numbers that is an identifier known as a Primary Account Number (PAN). PANs are uniquely associated with individual payment cards. Accordingly, once a transaction has been routed to the proper payment processor and/or issuing bank based on the BIN, known systems use the PAN to look up cardholder information to authorize and otherwise process the transaction.
The known BIN-based approach to routing messages presents a wide range of inefficiencies and problems. First, there are only a finite and relatively small number of BINs available. Although the range of BINs may be expanded by adding additional digits to the BIN, doing so would be extremely costly for the payment card industry. For example, acquiring banks and merchants generally rely on basic rules to determine how to route a given transaction. In many cases, the merchant or acquiring bank may look to see if the BIN falls within a range associated with a particular payment processor, and, if so, routes the transaction data accordingly. In known systems, such routing rules are programmed or hard-wired into payment processing equipment operated by the merchant and acquiring banks. As a result, expanding the number of digits for BINs would require reprogramming of these rules across the payment card industry and, particularly in instances where the rules are hard-coded, may require replacement of payment card processing equipment.
BIN-based routing is also very inefficient in that the full range of PANs associated with a given BIN is generally underused. As previously noted, a BIN corresponds to a specific payment card product while a PAN indicates a specific account associated with a cardholder. Assuming, for example, that a card number consists of 16 digits including six BIN digits and ten PAN digits, approximately ten million PANs may be associated with each BIN. To the extent fewer than ten million cardholders for a particular payment card product exist, the remainder of the available PANs go unused and, as a result, eliminate ranges of available card numbers.
BIN-based routing also presents significant downsides for acquiring banks as it increases the complexity of the acquiring bank's information infrastructure. If an acquiring bank routes transaction data associated with more than one payment processor, for example, the acquiring bank must maintain connections to each payment processor. Maintaining this infrastructure may be costly and may preclude acquiring banks from seeking to partner with additional payment processors. Moreover, the costs for equipment and maintenance in known systems may be cost-prohibitive to institutions seeking to enter the acquiring bank market.
BIN-based routing also increases network traffic. In known systems, acquiring banks must frequently download complete BIN lists and update their routing schemes accordingly. The process of downloading complete BIN lists can lead to heavy network traffic and may be costly to acquiring banks in terms of both the bandwidth required to retrieve the BIN lists and the ancillary negative impacts on the speed of other data transmissions performed during the download of the BIN list.
From a cardholder perspective, BIN-based routing results in a significant inconvenience for any cardholder attempting to change payment card products. Any time a cardholder changes from a first payment card product to a second payment card product, the cardholder must be issued a new payment card number because BINs are assigned at a payment-card-product level. Notably, a new card is generally required even if the second payment card product is offered by the same issuing bank as the first payment card product. Whenever a cardholder is issued a new payment card number the cardholder must update any instances in which the cardholder's payment card information is stored. Given the widespread use and storage of payment card information for online payments, recurring payments, automatic bill payments, and the like, changing one's payment card number can be a daunting task fraught with the risk of missing and failing to update one or more instances of stored payment card information. Notably, failing to properly update payment card information can cause a payment card transaction to be declined, potentially leading to additional fees for the cardholder and negative impacts on the cardholder's credit history. Given this inconvenience and risk, cardholders are generally apprehensive about changing payment card products even if their current payment card product may not be the best fit for their needs.
Issuing banks are also negatively impacted by BIN-based routing. If an issuing bank is dissatisfied with their current payment processor or is offered a more favorable partnership with a new payment processor, for example, the issuing bank may require significant and costly overhaul of their existing transaction processing systems to account for BINs of the new payment processor. These costs may dissuade an issuing bank from switching payment processors despite the new payment processor presenting a more favorable partnership.
Known BIN-based systems also limit the ability of issuing banks to offer new payment card products. When offering a new payment card product, issuing banks are generally required to acquire rights to an unused BIN. However, acquiring such rights may be cost-prohibitive due to the inherent scarcity of BINs. Specifically, the total number of available BINs is limited in two ways. First, the number of digits available for use as BINs caps the total number of available BINs. Second, the number of available BINs for an issuing bank is further limited because payment processors are assigned only specific ranges of BINs. As a result, whether a BIN is available for an issuing bank to acquire depends on both the overall availability of unused BINs and whether the issuing bank's payment processor has exhausted its assigned range of BINs. In light of these limitations, the cost to acquire rights to unused BINs may be sufficiently high to dissuade issuing banks from offering new payment card products to their customers.
In light of the above, a new system and method for routing computer messages in a payment processing network is needed that resolves the inefficiencies and negative implications of a BIN-based system.